The global Banking, Financial Services, and Insurance (BFSI) sector is experiencing growth, with market capitalization projected to rise to around ~US$25 trillion by 2025. This growth is driven by digitalization and a demand for innovative products. At the forefront of this is Agentic Artificial Intelligence (AI), which boosts operational efficiency, enhances customer service, and ensures regulatory compliance.
What is Agentic AI
Agentic AI refers to smart systems that can make independent decisions, pursue long-term goals, and take proactive steps by interpreting their surroundings. Unlike traditional AI, which automates repetitive tasks, Agentic AI is capable of strategic planning, adapting to new situations, learning from outcomes, and continuously improving its performance without needing constant human oversight.
This represents a major leap beyond standard automation. While traditional banking AI systems are great at processing vast amounts of data, Agentic AI takes it a step further by autonomously making decisions and acting on them. Instead of only suggesting solutions, these systems actively implement them, assess the results, and refine their effectiveness over time.
Applications of Agentic AI
- Compliance and Regulatory Monitoring: Agentic AI can monitor evolving regulatory requirements across jurisdictions, automate complex AML/KYC processes, and provide real-time auditability with minimal manual intervention.
- Wealth and Portfolio Management: By analysing market sentiment, macroeconomic indicators, and user-specific goals, Agentic AI enables dynamic, personalized portfolio adjustments and supports goal-based investment strategies.
- Operational Efficiency: These systems streamline backend processes such as claims handling, system diagnostics, and fraud detection. They also self-optimize workflows and resolve technical or transactional issues with minimal disruption.
- Credit Assessment: By integrating financial and behavioural data, Agentic AI enables faster, more precise credit evaluations and decision-making.
- Supply Chain and Logistics: Agentic AI enhances supply chain and logistics operations by enabling intelligent, autonomous, and adaptive systems. This leads to improved efficiency, stronger resilience, and better sustainability outcomes.
- Human Resources: Automating tasks can improve employee experience with streamlined onboarding, evaluation management, and engagement, enabling HR to focus on strategic initiatives.
Impact on the BFSI Sector
According to the latest RBI Annual Report, BFSI saw a rise in fraud cases in FY2024-2025, leading to losses of over US$4 billion. The use of Agentic AI can help tackle these challenges by improving real-time detection of suspicious activities and speeding up the identification of fraud. It also handles routine tasks, enabling people to concentrate on more strategic ones. Additionally, Agentic AI offers personalized services, enhancing convenience for customers. Its scalability enables it to serve remote and underserved areas, advancing financial inclusion.
Conclusion and the way forward
Agentic AI represents the next phase in intelligent automation for the BFSI sector. According to a study early adopters of AI, including Agentic AI, may expect a 20%+ productivity boost in the 4 years. However, HFS Research notes that only 6% of BFSI firms have successfully deployed advanced AI solutions across multiple areas – so this gap presents a major opportunity! Financial institutions that implement Agentic AI can gain advantages in efficiency, customer experience, and innovation. Responsible adoption, guided by collaboration among regulators, industry leaders, and technology providers, will remain crucial to unlocking its full potential.